A complicated bus-ride

By Sunita Narain

Created 11/30/2008 - 12:24

What does Barack Obama’s election as president of the us have to do with buses in India? A lot. Obama stands for what he calls ‘change’—in the way we think and do business. But the call will remain rhetoric unless we translate it into practical, everyday life, changes. To do that, we must bring changes in our business model and, most importantly, in what is essential and what needs to be invested in.

What have we learnt about translating good ideas into hard realities? Anyone who lives in Indian cities and gets crushed under the weight of traffic and pollution will accept we need a massive transition to public transport. This is a win-win answer, almost as persuasive as saying ‘we believe in change’.

Yet, the number of buses in our cities has gone down and not up. In 1951, one of every 10 vehicles sold in India was a bus; today, out of every 100 vehicles sold, one bus makes it to roads. Last year, the automobile industry placed another feather in its cap by selling over 1.5 million cars. In the same year, it sold only 38,000 buses. Not surprisingly, latest estimates by government-sponsored studies show that in spite of huge investment in flyovers and road expansive, driving speeds have come down in every Indian city. Let’s not even talk about choking lungs.

This is only the beginning of the problem. For even if we want buses we cannot have them. Why? Because our rich automobile companies, busy churning out cars for congested cities, do not have the capacity to manufacture buses. There are only two real players in the market—Tata Motors and Ashok Leyland. These companies do not make buses. They manufacture a truck chassis, on which various body builders assemble a bus body. As a result, when the city of Delhi or Ahmedabad places a tender for an urban bus, with improved design for comfort, it does not get many takers.

Then, when the city finally does place an order, the manufacturer cannot deliver buses in the quantity and speed required. Delhi placed its first order for some 500 low-floor urban buses over a year ago. It is still waiting for all the buses to be delivered by Tata Motors. The company says it can manufacture only 100 units a month in its newly developed facility in Lucknow. Now Delhi has placed another order for over 2,500 buses, this time dividing it between Tata and Leyland. Leyland says it will begin delivery some time next year and will also be able to manufacture only 100 units each month. Delhi adds 1,000 vehicles each day on to its roads. It desperately needs to overhaul its entire public transport system, now handled by individual operators. In this situation, it will need to order another 6,000-odd buses. But who will make them?

For believers of a market-led economy, this question is a no-brainer. They will say if there is a demand for buses, manufacturers will crowd it. But this is precisely where we need to heed the call for change, Obama-style. We need to recognise the market needs a product that currently is outside the reach of consumers. The urban bus will cost more than current variants, because it requires components for comfort and convenience. Therefore, the challenge is to manufacture high-comfort but affordable buses—a Nano-type solution. When Ahmedabad wanted to order the same-Delhi type buses, it found, to its horror, that bus companies quoted astronomical prices. It then had to settle for a standard diesel vehicle, tweaking its look with some creative bus body-building.

The bus market is not the car market, and that’s the problem. The latter has been carefully developed by manufacturers and credit agencies. So, even as manufacturers push and peddle their ware, they do little to push a vehicle that could take millions to their destinations. The bus is the poor person’s vehicle and nobody wants to do business in it, for buses will have to be driven by agencies that agree to take up the business of transporting people in cities. Currently, all our bus companies operate in the red. It is easy to dismiss this problem by calling it the curse of inefficient public sector utilities, and so completely miss the point.

The fact is even the most efficient modern bus service, in our poor cities, will cost more than the market can afford. Particularly if we want to get better buses on our roads, which means more capital investment. But even as we are willing to understand this affordability gap, when, say, it comes to subsidizing air travel, we refuse to do the same for buses. We will even subsidize cars, by charging them less road tax than a bus, or not charging them for their running cost. But we will never do this for buses.

The Union ministry of surface transport has itself calculated that the combined losses of the state-run public utilities—it was Rs 2,000 crore in 2004-05—would go down to less than Rs 900 crore if various Central and state taxes on bus companies were removed. It is, therefore, intentional policy that drives down this market. The policy is derived from an ideology that believes the market will fix everything, without considering how the market can be made to work where there is demand but less purchasing power or credit-worthiness.

Why does this happen in a country where the majority still takes a bus to work? Why is the voice of the majority neutered in our democracy? Maybe this is why we need, most of all, to understand Barack Obama’s victory, where the people spoke for change. Maybe, change is in the air.